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What are the Types of Futures Commodity Spreads?


#1

Is there only inter or intra commodity spreads? Could you list all the type of commodity spreads that a futures trader could use? Also, are spreads are a safer way to trade?


#2

@Shiv Thank you again for all your questions on this forum. In our opinion spreads are not any less risky than outright Futures positions. They can move in an opposite direction, and increase your risk.

There are Intra-Commodity Spreads where opposing positions are entered on the same product. For example, Long March Corn and Short July Corn.

Inter-Commodity Spreads are opposing positions are opened in different products. For Example, WTI Crude Oil and Brent Crude Oil. This example is also an example of Inter-exchange where positions are opened on different exchanges.

Further classifications would be Intra-Exchange Spreads where positions are opened on the same exchange. Finally, the last two would be Intra-Delivery Spread where Futures Commodities contracts have a common expiration and Inter-Delivery Spread where contracts have different expirations.

Thank you,
Matt Z
Optimus Futures


STIR Futures Trading Strategies